With the Mumbai terror attacks in the rear view mirror and the general elections ahead, the UPA government announced a whopping 34% increase in the defence allocation.
With the Mumbai terror attacks in the rear view mirror and the general elections ahead, the UPA government announced a whopping 34% increase in the defence allocation from the previous year’s budget to Rs1,41,703 crore, including Rs54,824 crore for capital expenditure.
In reality, though, the increase is 23.65% over the revised estimates, or the actual money that will be spent by the end of this financial year. Even then, the increase is an unusually high jump considering that the annual increase in defence budgets has hovered around 10-15% in recent years.
A senior ministry of defence official, who said the increase was “impressive”, gave two reasons: the increased liabilities in salaries and pensions because of the Sixth Pay Commission, and the several big ticket defence purchases which have to be paid for in the coming financial year.
While presenting the budget, Pranab Mukherjee had said, “We are going through tough times. The Mumbai terror attacks have given an entirely new dimension to cross-border terrorism. A threshold has been crossed… Needless to say, any additional requirement for the security of the nation will be provided for.”
The actual increase is 23.65% because the government had revised its defence budget for the present financial year to Rs1,14,600 crore from the announced figure of Rs1,05,600 crore. Yet, this increase was all in the revenue allocation (pertaining to salaries, etc), while the capital allocation for fresh weapons’ purchases were actually scaled down.
The senior MoD official told DNA among the major purchases this year is the deal with Boeing for 8 long-range P-8I maritime reconnaissance aircraft for $2.1 billion. The MoD will also have to release payment to Russia for the Admiral Gorshkov aircraft carrier. “Some years we have to make more payments for purchases, it is cyclical,” said the official.
The capital allocation, meant for fresh purchases, is Rs54,824 crore, a massive 33.72% increase over the revised estimate of Rs41,000 crore for the 2008-09 financial year.
The official said the ministry had “scaled down” the capital account from Rs48,007 crore, as announced in the last budget, to Rs41,000 crore. “The reason was that some major payments were not cleared,” he said, pointing to continuing negotiations with Russia over the hiked price of the Admiral Gorshkov and the delay in the US clearing the deal with Boeing. The revenue allocation is Rs86,879 crore, an increase of 18% over the revised estimate of Rs73,600 crore.
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